Whiplash claims reform pushed back to next year due to COVID-19

The UK's ministry of justice has decided to delay the implementation of whiplash reforms until April 2021 in light of the ongoing COVID-19 pandemic, which has had an unprecedented impact on the medical, legal and insurance sectors.

The government had decided to implement the whiplash reforms in August 2020. The whiplash reforms are a package of measures introduced by the government to reform the way low-value personal injury claims arising from road traffic accidents are handled.

Under the programme, small claims track limit for road traffic accident related personal injury claims will be increased to £5,000, while a fixed tariff of damages for pain, suffering and loss of amenity for whiplash injuries will be introduced, in addition to a ban on the making or accepting of offers to settle a whiplash claim without a medical report.

According to the Society of Claims Professionals (SOCP), the delay in implementation will allow insurance professionals to fully focus on customers during the coronavirus outbreak.

SOCP noted that implementation of the new scheme by insurers was proving difficult even before the current coronavirus situation as the new updated tariffs for whiplash injuries have yet to be published.

Ashton West OBE, advisory board member of the Society of Claims Professionals, said: “While the proposed reforms to contain the proliferation of whiplash claims are welcomed by insurers, the impact of Covid-19 on insurers is creating additional pressures and demands to ensure they are able to meet the needs and expectations of their customers.

“Currently, exposures for motor insurers have decreased significantly as activity on the road has diminished by something in excess of 60 per cent. However, as we exit from the current restrictions and traffic on the roads increases again, there is certainly an expectation that an increase in whiplash claims will emerge again, driven by claims management activity coupled with the possibility of some people being attracted to easy money following a period of financial distress.

West added that “however, insurers and the legal service providers that work for them are experiencing upheaval and stretch in undertaking normal business activity in meeting the needs of their customers often sustaining their business via business continuity plans with reduced staff and different ways of working. Meeting the expectations of customers in the current circumstances must be the priority and against this background, imposing upon insurers the need to implement an entirely new process for handling whiplash claims, scaling this up to meet demand and diverting IT resource to meet the new Portal requirements, would have placed unnecessary pressures upon them at this time.”